Appeals Dismissed: No Substantial Law Question Found; ITAT and CIT(A) Deletions of Additions Upheld, Section 132(4) Statements Unsupported

The court dismissed the appeals, upholding the concurrent findings of the appellate authorities. It found no substantial question of law for consideration, affirming that the ITAT and CIT(A) correctly deleted the additions made on account of gross profit due to flawed comparisons by the AO. The court also agreed that statements recorded under Section 132(4) lacked corroborative material, thus not justifying additions. The distinction between scrutiny and summary assessments was deemed irrelevant for Section 153A, and reliance on the Kabul Chawla judgment was appropriate as no stay was in place.

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Issues Involved
1. Error in upholding the order of CIT(A) and deleting additions made on account of gross profit.
2. Error in not appreciating the evidentiary value of statements recorded under Section 132(4) of the Income Tax Act.
3. Distinction between scrutiny assessment under Section 143(3) and summary assessment under Section 143(1) concerning Section 153A.
4. Reliance on the judgment of CIT vs. Kabul Chawla despite the issue pending before the Supreme Court.

Detailed Analysis

1. Error in Upholding the Order of CIT(A) and Deleting Additions Made on Account of Gross Profit
The appellant contended that the ITAT erred in upholding the CIT(A)'s order, which deleted the additions made on account of gross profit. The additions were made after rejecting the books of account, which the appellant claimed did not reflect the true and correct state of affairs of the Assessee Company. The ITAT and CIT(A) found that the Assessing Officer (AO) had compared the purchase of scrap with the sale of finished goods, ignoring the fact that the assessee dealt in various items with different qualities and price fluctuations. The ITAT noted that the AO's comparison was between incomparable products and that the gross profit rates of subsequent years were accepted by the AO without any additions.

2. Error in Not Appreciating the Evidentiary Value of Statements Recorded Under Section 132(4) of the Income Tax Act
The appellant argued that the ITAT failed to appreciate that the statements recorded under Section 132(4) during search proceedings constituted 'incriminating material'. However, both CIT(A) and ITAT found no corroborative material to support the statements of Mr. Vishesh Gupta. The court reiterated that statements recorded under Section 132(4) alone, without any other material discovered during search, cannot justify additions. This position was supported by previous judgments, including PCIT vs. Anand Kumar Jain (HUF) and CIT v. Harjeev Aggarwal.

3. Distinction Between Scrutiny Assessment Under Section 143(3) and Summary Assessment Under Section 143(1) Concerning Section 153A
The appellant's distinction between scrutiny assessment under Section 143(3) and summary assessment under Section 143(1) was deemed irrelevant for the purposes of Section 153A. The court emphasized that if no incriminating material is found during a search, no addition can be made for assessments that had attained finality. This was supported by the judgment in Principal Commissioner of Income Tax vs. Bhadani Financiers Pvt. Ltd.

4. Reliance on the Judgment of CIT vs. Kabul Chawla Despite the Issue Pending Before the Supreme Court
The appellant contended that the ITAT erred in relying on the judgment in CIT vs. Kabul Chawla, as the issue was pending before the Supreme Court. However, the court noted that there was no stay on the Kabul Chawla judgment. Consequently, the issue was considered covered by the judgments in Bhadani Financiers Pvt. Ltd. and Kabul Chawla.

Conclusion
The court concluded that no substantial question of law arose for consideration. The concurrent findings of fact by the appellate authorities were upheld, and the appeals were dismissed. The court reiterated that it would not interfere with findings of fact unless there was a substantial question of law, in line with the Supreme Court's rulings in cases like Ram Kumar Aggarwal & Anr. vs. Thawar Das and Hero Vinoth (Minor) vs. Seshammal.

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